What is a Corporate Venture Studio?

Throughout the Fortune 500, the term ‘venture studio’ is a lot like the word ‘innovation’, it can mean everything and nothing all at the same time, and it can be defined differently based on who you ask or where you ask. If you want to better understand what a corporate venture studio is and what value it can deliver … we can start with a simple question.

Today in just about every board room across the country, most are actively discussing their Generative AI strategy … a term that wasn’t even mentioned just 12-to-18 months earlier; the question is, why?

Did anyone on our data team say anything? Did anyone within our corporate venture, H1, H2, or H3 innovation teams say anything? Did any of our consultants from McKinsey to EY to Deloitte say anything? Again, for most, the answer is going to be “no”, and the question would be … why? 

This is not an internal deficiency; none of those groups should have said anything, or at least, they shouldn’t have been expected to within their remit. Generative AI was, at the time, a new technology, one prone to promise and hype. To do anything with this new and emerging technology would have required collaborating with a “start-up” that was untested with a technology that hadn’t been validated.

• We certainly were not going to give our internal proprietary data to that for testing.

• We certainly were not going to put our customers in front of that for validation.

• And, we certainly were not going to integrate anything that early into our core infrastructure for implementation.

• Most importantly, this brand new shiny toy wasn’t going to win the opportunity-cost game in becoming a product priority and making its way onto our coveted roadmap.
  
  

While we needed to hear it, someone else needed to say it. So then, the next question becomes, who on our teams are immediately jumping into the GPT-3 beta when it’s released in August of 2021, over a year before the launch of ChatGPT? 

This is the value of a venture studio

A venture studio, at its core, is a sandbox where ideation and validation converge at the earliest possible moments. It’s an experimental space that sits at a safe distance from its parent. It’s a space that quantifies failure through power law distribution, that invests in disruption with a strategic thesis and diverse coverage area, and whose ROI is a return on insights. Insights that uncover and unlock those emerging technologies that have the ability to be disruptive and transformative to the core business.

In August of 2021, we should not be shifting our priorities, OKRs or KPIs around Generative AI … that would be premature. However, we do start building a small stand-alone sandbox where the impacts of a new and emerging technology on the future P&L can be strategically exposed, experimented, and executed on … from a safe distance. A venture studio is where you place big bets early and often, with small teams and nimble budgets, taking big swings while mitigating risks. A venture studio is a complement to corporate innovation, a partner to corporate venture, and a collaborator to future product roadmaps.

Where most seek innovation, a venture studio identifies inevitability.